Risk Evaluation and Management

As part of the business plan, slide presentation and the complete business plan, you need to evaluate your risks and what risks require risk management.

Investors also evaluate risks because they want to make sure that the risks are as minimal as possible and the profits are as large as possible.

Never hype up the potential profits and never underestimate your risks. Be realistic because investors have their experts who know how to evaluate risks and if they see that you have greatly underestimated your risks and overestimated your potential profits, they will not be very likely to fund your venture.

How can you evaluate and manage risks? Risks depend on your market sector and industry. Risks are basically events that can affect your company and disrupt your company’s cash flow, potentially doing serious and permanent damage to your company. All business has its share of risks, some of which are greater than others.

These risks can range from economic risks, such as financial crises, which can hurt business, to physical risks, which can directly impact employees, clients and infrastructure. In doing your business plan and getting it ready to present to investors, you should identify each risk and have a plan about how to address and manage them.

This is crucial because investors look at risks and the strategies to manage these risks.